Correlation Between Clearbridge Energy and New Economy
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and New Economy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Clearbridge Energy and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and New Economy Fund, you can compare the effects of market volatilities on Clearbridge Energy and New Economy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Clearbridge Energy with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and New Economy.
Diversification Opportunities for Clearbridge Energy and New Economy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clearbridge and New is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and Clearbridge Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Clearbridge Energy Mlp are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and New Economy go up and down completely randomly.
Pair Corralation between Clearbridge Energy and New Economy
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.77 times more return on investment than New Economy. However, Clearbridge Energy Mlp is 1.31 times less risky than New Economy. It trades about 0.03 of its potential returns per unit of risk. New Economy Fund is currently generating about -0.14 per unit of risk. If you would invest 5,157 in Clearbridge Energy Mlp on October 9, 2024 and sell it today you would earn a total of 56.00 from holding Clearbridge Energy Mlp or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. New Economy Fund
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| New Economy Fund |
Clearbridge Energy and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and New Economy
The main advantage of trading using opposite Clearbridge Energy and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, New Economy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in New Economy will offset losses from the drop in New Economy's long position.| Clearbridge Energy vs. Pioneer Money Market | Clearbridge Energy vs. Cref Money Market | Clearbridge Energy vs. Money Market Obligations | Clearbridge Energy vs. John Hancock Money |
| New Economy vs. Calamos Vertible Fund | New Economy vs. Lord Abbett Vertible | New Economy vs. Invesco Vertible Securities | New Economy vs. Franklin Vertible Securities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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